Simulating a Catastrophe Insurer

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This Demonstration simulates the financial history of a catastrophe insurer. You select a variety of parameters that affect that financial history and the Demonstration responds with a graphic showing the annual net worth of the insurer for each of a user-chosen number of sample runs. You can also choose to display a histogram showing the distribution of the net worth of the insurer either at the end of the simulations or at its lowest annual value.
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Contributed by: Seth J. Chandler (March 2011)
Open content licensed under CC BY-NC-SA
Snapshots
Details
The data from which the event sets are calculated is based on the projected losses of the Texas Windstorm Insurance Association from hurricanes as of 2007.
Snapshot 1: the distribution of the terminal net worth of the insurer using the default settings
Snapshot 2: the distribution of the lowest annual net worth of the insurer using the default settings
Snapshot 3: the financial history of the insurer if maximum losses are capped at 5 instead of the default value of 1
Snapshot 4: the financial history of the insurer if it has to borrow at 8% instead of the default value of 5%
Snapshot 5: the financial history of the insurer if losses are amplified by 50%
Snapshot 6: the financial history of the insurer if premiums are increased by about 50% over their default value
Snapshot 7: the financial history of the insurer using 50-year runs
Snapshot 8: the distribution of the lowest annual net worth of the insurer using 50-year runs
Permanent Citation
"Simulating a Catastrophe Insurer"
http://demonstrations.wolfram.com/SimulatingACatastropheInsurer/
Wolfram Demonstrations Project
Published: March 7 2011